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FCA seeks to ban and fine adviser £290k for ‘lack of integrity’

The FCA is seeking to ban and fine an adviser for lacking integrity.

Paul Reynolds, formerly known as Paul Brian Reynolds, is appealing the decision to the Upper Tribunal.

The decision notice reveals the FCA has decided to fine Reynolds £290,344 and ban him from performing any regulated activities because he is not fit and proper and lacks integrity.

Reynolds was an approved person at Aspire Personal Finance Limited, previously known as Positive Financial Strategies Limited, between 2005 and 2010.

He stands accused of recklessly recommending high risk investment products to eight retail clients, when he knew that he could not justify their suitability.

The regulator says he was knowingly involved in the falsification of the signatures of two clients on sophisticated investor certificates to suggest that the investment could be legitimately promoted;

It says he also deliberately made investments on behalf of two clients without their knowledge or authorisation.

The FCA says Reynolds deliberately produced inflated valuations of clients’ investments in an attempt to mislead them and conceal the poor performance of the investments he had recommended.

It also says he deliberately submitted loan facility and investment applications, on behalf of a number of his clients, which contained inflated incomes and other false and misleading information.

Finally, he is accused of deliberately attempted to mislead the FCA by retrospectively creating various documents and misrepresenting that they were contemporaneous.

The decision notice says Reynolds’ actions on these eight clients were particularly serious as most of them were on low incomes.

They had little or no investment experience and the complex and high risk products he recommended were unlikely to be suitable for their needs.

The FCA says in some instances they were unaware that they had invested in unregulated investments or of the associated risks.

FCA director of enforcement Tracey McDermott says: “People go to advisers because they want expert help to make the most of their money. They should be able to trust advisers to act in the customer’s best interest and recommend products which will suit their needs. 

“It is critical that firms and individuals put their customers’ interests first.”

Reynolds unsuccessfully sought to stop the decision notice being published. The Tribunal will hear his case on 8 and 9 December 2014.


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There are 12 comments at the moment, we would love to hear your opinion too.

  1. These are very serious allegations indeed. They might well justify suspending the alleged offender pending a hearing before the Upper Tribunal. However should they have been given publicity? The case for publicity is to protect the public, for instance by warning of a problem with a product or its general distribution. The problem with these allegations being given publicity is that if they are not accepted by the Upper Tribunal the adviser’s reputation is destroyed.

    While the previous “no publicity” rule was too restrictive, the case against it was that the investing public was not warned or real and present dangers. SUrely publicity should only be permitted when there is a real and present danger that publicity will reduce or even remove..

  2. Surely, this is not simply a case of “not being a fit and proper person”. This is fraud and should dealt with accordingly with due process within the law.

  3. Bad news travels faster and with more damage, than good !!

    It would be nice if Tracy Mc would highlight the fact that the actions of this man completely undermines the good advisers who “do” put their clients at the heart of their business and advice

    I think we as advisers do recognise there are bad advisers which are not being found out quick enough, and its this (I believe) small minority, that completely levels the trust and reputation that the good advisers build up.

  4. Compliance Manager 23rd October 2014 at 10:45 am

    These very serious allegations appear to go way beyond “mere” breaches of FCA Rules.

    Forgery and fraud are criminal offences. If FCA have sufficient grounds to publicise these allegations then they have – I sincerely hope – also reported them to the Police for proper prosecution in court.

  5. Just a general comment, with regards to the ‘lack of integrity’ accusation.

    I’m thinking of a different sector – tobacco – and the warning that cigarette packets carry on them.

    Given that cigarrettes can and do kill, why is it acceptable for the manufacturers and retailers and government to profit from this life threatening product, but at the same time, we are villifying someone who could be described as a retailer?

    Why isn’t a similar warning, ‘This product could seriously damage your wealth’ enough to protect the adviser, when a warning on a cigarette packet about something more valuable – a human life is?

  6. Why if these events took place between 2005 & 2010 has it taken so long to act?

  7. Brian Weatherley, Compliance Manager totally agree, if these allegations are true and can be substantiated, fraud and forgery are criminal offences and should be dealt with as such.

  8. Rt Hon Sir Arthur Streeb-Greebling 23rd October 2014 at 12:57 pm

    If this standard is deemed to be what the chattering classes (above) consider reprehensibe, then there aren’t enough prisons to accomadate half the City of London if held to the same standard..

    Rt Hon Sir Arthur (formerly known as Arfer).

  9. brian weatherley 23rd October 2014 at 1:35 pm

    Arfer @12257

    We are not “chattering classes” simply because of our comments and do not consider the actions outlined as simply reprehensible (deserving of blame or wicked) . We consider them to be criminal as are all other fraudsters no matter where they are found. The words brought to justice must apply

    Perhaps Arfer might wish to appraise us of his views regarding the falsification of client signatures to defraud. Acceptable or Not ?

  10. Adrian: If I ask a tobacconist for a pack of lethal tar and nicotine and he gives me a pack of lethal tar and nicotine I have no cause for complaint. If I ask him for a pint of milk and he gives me one laced with arsenic then I do.

  11. brian weatherley 23rd October 2014 at 3:34 pm

    Arfer @1257

    The additional information now to hand seems to suggest that Reynolds was indeed involved in criminal activity. The FCA findings should now be made available to the fraud squad

  12. @Sascha Klauß

    A better analogy might be asking for halibut and getting Fugu!

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